智通财经网·2025-08-08 00:57Core Viewpoint - The Hong Kong real estate market is entering a new upward cycle driven by factors such as industry, population, and interest rates, with all real estate companies operating in Hong Kong expected to benefit from this trend [1][3]. Supply Constraints - Supply constraints have always characterized the Hong Kong real estate market, with high population density in developed areas and slow construction of new functional zones [1]. - The average living space per person in Hong Kong is less than 20 square meters, significantly lower than mainland China and other major East Asian cities [1]. - The home ownership rate is relatively low, with nearly half of the population renting, and the market is primarily driven by secondary housing transactions [1]. Historical Market Cycles - Since 1993, the Hong Kong real estate market has experienced five cycles of boom and bust, with population, economic fundamentals, and interest rates being key influencing factors [1][2]. - The upward phases of the market have historically been longer than the downward phases [1]. New Cycle Drivers - The new upward cycle is supported by the robust development of the financial services sector, government policies attracting high-end talent, and a gradual decrease in interest rates expected after May 2025 [3]. - The cumulative net migration of high-purchasing-power individuals has been increasing since the second half of 2022, further supporting demand [3]. - The exit of previous demand-restricting policies has also contributed to the market's positive outlook [3]. Company Performance - A selection of ten large-cap real estate companies in Hong Kong, with moderate leverage and a high proportion of local business, is expected to outperform the market during this upward cycle [4]. - In the initial 12 months of the last upward cycle (from January to December 2009), these companies had an average cumulative return that outperformed the Hang Seng Index by 28 percentage points, with an absolute return of 80.2% [4]. - Even after excluding the first three months, the remaining nine months showed a 12 percentage point outperformance against the market index, with an absolute return of 73.2% [4].